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2019 (12) TMI 708 - HC - Indian LawsDishonor of Cheque - section 138 of Negotiable Instruments Act - Complaint against the petitioner who is neither a Director or Party to the agreement - Whether continuation of criminal proceedings against the petitioner is liable to be quashed on account of failure on the part of the complainant to establish any involvement of the petitioner in the dishonour of cheques mentioned above and non issuance of legal demand notice to the petitioner by the complainant? HELD THAT:- It is not disputed that the complainant issued notice to the respondent company as well as two of its directors, being respondent nos. 3 to 5, however, admittedly no notice has been issued to the petitioner under Sections 138 (1) (b) NI Act. As per the aforesaid provision, the payee or the holder in due course of the cheque, as the case may be, shall make a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid. As per sub clause (c) Section 138 (1) of the said Act, the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice. Admittedly, in the present case, notice raising demand for payment has not been issued to petitioner by the complainant. Thus, as per the statute, to fasten a liability upon the accused/petitioner, it was mandatory to issue a notice to him under the aforesaid Act, that too within the stipulated period. In the absence of any notice, as stipulated under the Act within the prescribed time period, the summons and proceedings against the petitioner are vitiated and the same deserve to be quashed - petition allowed.
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